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Applying The Scientific Method To Charity

Posted on August 9, 2016 by Gleb Tsipursky

[Editor's Note: If you are interested in the topic of Effective Altruism, there is a Coursera course by that name being taught right now by the well-known philosopher Peter Singer of Princeton University! Coursera courses are free and there is an entire week devoted to the Giving Game including an opportunity to play online as part of the course.]

“Thank you. I never thought of applying the scientific method to charity. My giving will never be the same.”

I was delighted to hear this feedback from a participant in a workshop I ran for my local Unitarian Universalist Humanist group at the First Unitarian Universalist Church of Columbus in late July 2016. The workshop, called a Giving Game, aimed to help facilitate rational thinking about our positive impact on the world through applying the scientific method to charity.

Participants in a Giving Game learn about a couple of pre-selected charities, think about and discuss what methods and metrics they should use to select a charity, and then vote on what charity will get a real donation. The donation is sponsored by an outside party, typically The Life You Can Save, which donates $10 per participant to the charity that wins the vote.

So anyone who comes to a Giving Game guarantees $10 being given to a charity without paying a penny, while enjoying discussing how they can enact their values and improve the world through making the most impactful gifts to charity. Intentional Insights, the nonprofit organization I lead that popularizes science-based strategies for rational thinking to UUs and other reason-oriented people, received a grant from TLYCS to fund these charitable donations through facilitating Giving Games for UUs.

How Do We Show Our Care For Humanity?

Why should we care about applying reason and science to charitable giving? Well, as UU Humanists, we care deeply about the fate of humanity. Using our resources of time and money to make the world a better place - decreasing suffering and advancing flourishing around the globe - is the best way to truly live our values and create heaven on earth, as we know there’s no afterlife to strive for.

Yet it’s so hard to know how to make the world a better place. During the Giving Game at First UU, we got down to the roots of this dilemma. The UUs who came to the workshop all described how much passion they had about making the world a better place, but had so much trouble figuring out the best place to give. One quoted Andrew Carnegie’s well-known phrase, “It’s harder to give money away intelligently than to earn it in the first place.”

After all, there are so many worthy causes and demands on our time, energy, and money! It can sometimes feel overwhelming to decide where to spend our limited resources. Perhaps that’s why most people don’t take the time to evaluate well where they give. Americans donate over $350 billion a year to charity, but shockingly little thought goes into how and where this money is given: 2/3 of gifts are made without any research at all, and only 3% research the effectiveness of a charity before they give.

This creates a huge opportunity - by incorporating reason, science, and evidence into our charitable decision-making, we as UUs can dramatically increase the amount of good our gifts accomplish. Channeling the spirit of the 4th Principle, a free and responsible search for truth and meaning, the Giving Game enables us to align our values and our actions, our heads and our hearts, to help our gifts do the most good in the world through applying the scientific method to charitable giving.

The Barriers To Giving Well

Unfortunately, the nonprofit sector is not well set up for us to apply reason to inform our giving, as we discussed at the UU Giving Game event in late July. The vast majority of communication from charities comes in the form of stories, rather than hard data about their impact. Charities use stories because they work - they pull at the emotional heart strings of people to motivate them to give. Yet stories tell us close to nothing about the actual effectiveness of a charity.

One example that came up was the work of Make-A-Wish Foundation, which grants the wishes of dying children. Their work allows children to be a pirate, princess, or fighter pilot for a day, at the cost of approximately $50K to satisfy each wish. This charity has wonderful stories about helping dying children fulfill their dreams, which get people to give it over 350 million a year.

By contrast, consider Against Malaria Foundation, which saves a child’s life for about $3K from this deadly disease. For the same amount of money as Make-A-Wish, it saves 17 children, giving them 17 lifetimes of stories. However, Against Malaria Foundation does not have good stories to tell, and thus by comparison gets much less funding, despite arguably doing much better work to decrease suffering and advance global flourishing.

This problematic approach to charitable giving relates to how our brain processes information. We are strongly oriented toward believing in stories as true, regardless of whether they are or not, a phenomenon called the narrative fallacy. To counteract this problematic thinking error, we have to use an approach informed by the scientific method to evaluate charities well.

Evaluating Charitable Giving Rationally

After addressing the problems in the nonprofit sector, we talked about how we can evaluate charities effectively. Our discussion turned to the issue of overhead costs, meaning the money spent by a charity on all costs not directly associated with its programs devoted to fulfilling its mission. Several folks indicated they used Charity Navigator, a popular charity evaluator service that uses the finances of charities as its evaluation metric

If only it were that easy! Within the nonprofit sector, this is known as the overhead myth, and there’s even a website, overheadmyth.com, devoted to debunking this myth. While in most cases a nonprofit should not spend more than 40% on overhead, anything below that is fine and is not indicative of any issues with nonprofit quality. Nonprofits need to pay their staff a fair salary that enables a decent lifestyle, and invest money into marketing and fundraising in order to achieve their missions. Moreover, bad nonprofits such as the Wounded Warrior Project are often evaluated highly by Charity Navigator because they fudge their books. All this makes looking at overhead a poor evaluator of nonprofit quality.

Instead, we need to apply the scientific method to charity to get our desired outcomes. Our goal is to make the most positive impact on the world in accordance with our values. We have limited resources to accomplish that goal. So the rational approach is to see the maximum benefit we can get from our investment of resources. The key metric, then, is cost effectiveness, meaning the amount of good that a nonprofit does per dollar invested.

Now, it’s not easy to do the research to evaluate this question for each charity that you might consider. Fortunately, there are several charity evaluators that apply this scientific method to provide comparisons of charities based on in-depth research of their cost effectiveness. GiveWell offers in-depth reports on charities addressing global poverty issues. The Life You Can Save, besides its sponsorship of Giving Games, provides an Impact Calculator that you can use to evaluate the exact impact of whatever donation you might want to make to a number of global nonprofits. For those concerned with animal wellbeing, Animal Charity Evaluators provides rankings of the most effective global animal welfare organizations.

The participants in the Giving Game expressed a great deal of interest in these organizations, and some used their mobile phones to visit the websites of these charities during the event itself. Excited about the prospect of using these “consumer report” organizations for charity, they peppered me with questions about how these organizations worked. They came away highly satisfied with the answers about these organizations investigating thoroughly the programs and finances of each nonprofit they evaluated, using the latest data science tools.

Naturally, they asked me whether similar organizations existed for other causes, such as policy reform, education, women’s rights, or local charities right here on Columbus. Unfortunately, no other organizations of this sort exist, since it’s quite hard to set one up. These consumer watchdogs for charity are all nonprofits themselves, to prevent the obvious conflicts of interest arising from taking money from charities they evaluate - so it required a dedicated group of funders to provide the resources to set one up for any set of issues.

Giving Game Charity Comparison

After discussing the problems of the nonprofit sector and how to evaluate charities using reason and science, we got to the business of evaluating charities.

First, we discussed what metrics had relevance when picking charities. Participants brought up issues such as effectiveness in accomplishing the mission, good use of money, making the most positive impact in the world, serving neglected communities, addressing systemic issues, and solving important problems.

Next, we compared the charities we pre-selected on these categories. These included the top-rated charity by GiveWell, Against Malaria Foundation; a highly-rated GiveWell charity, GiveDirectly, which transfer money directly to poor families in developing countries; Planned Parenthood, which provides various medical services for women, including abortion, and advocates for women’s health rights; and the National Center for Science Education, whose programs focus on defending the teaching of evolution and climate change in the classroom.

The discussion proved intense and heated. Participants made passionate arguments in favor of each. Against Malaria Foundation had proponents for it most clearly matching the humanist values of saving lives, as it saves a life for $3K. GiveDirectly saves a life for $15K, but provides the additional benefit of dignity and freedom for those who get the money, and matched the values of a number of participants. Those interested in women’s rights lobbied for Planned Parenthood, and science education had a number of adherents as well, of course.

In the end, each organization got some votes, and since each person’s vote counted for $10, all got donations. Many folks signed up to the email list to get more information about effective giving.

It was interesting to see that a number of people voted for organizations they never heard of before the meeting, such as GiveDirectly and Against Malaria Foundation, over organizations which they knew and trusted and donated to previously. When I asked them why they chose to vote that way, one person raised her hand and said that she could really trust organizations such as GiveDirectly and Against Malaria Foundation because they were thoroughly evaluated by the most reputable and high-quality charity evaluators.

Any UU Humanist group can organize such a Giving Game through using this UU Giving Game packet. You can also use the same packet for large, whole-congregation events, as well as Religious Education classes or Small Group Ministry meetings. Doing so is an excellent way of advancing reason-oriented social justice work, improving rational thinking around charitable giving, and building community. I hope you consider doing so, and let me know if you have any questions at gleb@intentionalinsights.org!

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About the UU Humanists

The Unitarian Universalist Humanist Association (formerly HUUmanists) is committed to Humanist principles of reason, compassion, and human fulfillment enumerated in the Humanist Manifestos and in the seven Principles of the Unitarian Universalist Association. We seek (1) to promote a broad acceptance of Humanism in our society, particularly throughout the Unitarian Universalist Association and its congregations, and (2) to provide an active interface between Unitarian Universalists and the secular community.